Murdoch’s News in Rugby League scandal

News Limited chairman and chief executive, John Hartigan, left, NRL CEO David Gallop and Melbourne Storm chairman Rob Moodie during the press conference at NRL Headquarters to announce the penalties handed down to the Melbourne Storm Club in relation to salary cap breaches. Photo: Dallas Kilponen

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NRL premiers Melbourne Storm have been stripped of two premierships and fined a total of $1.6 million after being found guilty of long-term salary cap breaches.

NRL chief executive David Gallop announced they would also not be allowed to accrue any premiership points in the 2010 season.

KEY POINTS

Stripped of the 2007 and 2009 Premierships

Stripped of the Minor Premierships of 2006-8

Stripped of all competition points for the 2010 season

Fined $500,000

Will be forced to return $1.1 million in prizemoney (prizemoney to be distributed evenly among the other 15 clubs)

Salary cap breaches amounted to at least $1.7 million over five years.

Gallop said the Storm - owned by Rupert Murdoch’s News Corporation - had been found to have rorted the salary cap by at least $1.7 million over five years.

“They had a long term system of effectively two sets of books and the elaborate lengths they have gone through to cover this up has been extraordinary,” said Gallop.

While Melbourne lost their titles from the 2007 and 2009 seasons Gallop said neither losing grand finalists Manly or Parramatta would assume those titles.

The Storm were also stripped of three minor premierships.

“The club has furthermore been fined $500,000 and will be forced to return $1.1 million in prizemoney with the prizemoney being distributed evenly among the other 15 clubs,” said Gallop.

The investigations revealed the Storm maintained a dual contract system, with the club confirming on Wednesday that side letters promising extra payments were stored in a secret file.

“The most damning indictment is the systematic attempt by persons within the club to conceal payments from the salary cap auditor and, it would now seem certain from the club’s board and from its owners, on an ongoing basis,” Gallop said.

“It was through this system that they were able to attract and retain some of the biggest names in rugby league.

“In doing so they have let down the game, the players and the fans of the Melbourne Storm.”

Gallop added the Storm need to quickly find a way to rectify the situation to have any chance of regaining their status in the competition.

“Certainly by the 2011 season they need to be operating within the salary cap and how they do that I’m not sure at this stage,” he said.

News Limited chairman and chief executive John Hartigan said the company may take further action against management involved in the scandal.

“Today is a regrettable day in the history of the game,” he said in a statement.

“I don’t think there will be a league fan anywhere who is not outraged by what appears to be a highly orchestrated, deeply deceptive fraud in which there was systematic and deliberate concealment of unlawful payments to certain players over an extended period.”

News announced that it had engaged Deloitte to audit the club’s finances and that it had appointed league stalwart Frank Stanton as caretaker chief executive. The matter had also been referred to the police, News revealed in a statement.

“This elaborate collusion and the scale of the deception has been concealed from News Limited and it is our understanding that it has been concealed from the Board of the Storm,” Mr Hartigan said.

“I regret we have probably not yet uncovered the full extent of this fraud. Make no mistake, News does not tolerate this behaviour.

“I want to apologise unreservedly to the vast majority of people at the club who are victims of this fraud and to the other 15 premiership clubs, to the Storm’s thousands of loyal fans and rugby league fans everywhere, and to the Storm’s sponsors and people who support what the club does including the Victorian Government.”